Public Measure D

Questions and Answers At Public Meeting

October 29, 2013

"Shall the City of Emmetsburg, Iowa issue its notes in an amount not to exceed $3,500,000 for the purpose of paying costs of constructing and equipping all or part of the Emmetsburg Municipal Communications Utility, including the acquisition, construction and installation of a fiber to the premise broadband communications system and related equipment and distribution facilities, and including all or a portion of the costs associated with connecting the Emmetsburg Municipal Communications Utility fiber system with the system of the Community Cable Television Agency of O'Brien County a cooperative undertaking among the cities of Hartley, Paullina, Primghar and Sanborn pursuant to the provisions of Chapter 28E, Code of Iowa?"

Over 75 Emmetsburg residents gathered at the high school auditorium to learn more about the proposed Emmetsburg Municipal Communications Utility last Wednesday, Oct. 23.

Paul Saxton gave a summary of telecommunications in Emmetsburg, noting that in 1999 a vote passed to establish a telecommunications system at a cost of $10 million.

"With rapid changes in technology, we decided not to progress because of cost," Saxton said.

The proposed system drops the cost by $3 million.

Project engineer Larry Butler added, "This is a fiber network that will connect us to the rest of the world."

TCA currently serves four communities, with its head-end in Everly. They have a board of directors that run the financial end, with one member from each community and one at-large member; and a programming board which oversees all of the cable television line-up.

DJ Weber said advantages include reduction in cost, upgrades, keeping up with technology, and school channels as a community service.

"Every dollar earned in each community, stays in that community," he said.

Rick Brennan said Revenue and General Obligation Bonds will be used to finance the debt. Public Measure D approves $3.5 million in G.O. Bonds and the utility would also issue $2.63 million in Revenue Bonds. Surplus cash reserves will also be used.

"If the vote does not pass, the project will not move forward," added Steinkamp.

"It is an exciting time when the community can make a decision to take control of their own telecommunications," said Curtis Dean. "We're talking building the next generation of broadband."

Questions and answers from interested community residents ranged from technical to financial and everything in between.

Throughout, DJ?Weber repeated, "The success of this utility rides on the people of this community."

Residents learned that current providers will offer the latest and greatest deal, allowing customers to make a choice. They also heard that if this funding is voted down on Nov. 5, those offers will not be extended.

"This (joint venture with TCA) is the newest, latest and greatest and it will bring speed to your house," Deb Davis told the group.

Emmetsburg residents received a brochure with their monthly utility bill, offering information about the telecommunications utility. The brochure was generated and distributed by FUEL.

City Administrator John Bird said the financial is based on 60-percent subscribership of all services:?cable television, internet and telephone.

"It is important for everyone to know that the financial model is conservative on the revenue side," he said.

General Obligation bonds would be in effect for 15 years, but for every one-percent of subscribership increase, it adds to the cash flow which would help eliminate the debt.

Emmetsburg Municipal Utilities looked at others besides TCA. Nick Steinkamp stated, "One of the main reasons we chose tCA, we have ownership and board seats. We're driving the bus not buying the bus. We will be involved indecision making."

Talking about a probably increase in property taxes, Deb Davis referred to a study that shows, homes with fiber to the home increases the value of the home up to $5,000.

"If you look at the municipal utilities in general in every community that has created municipal telecommunication utility and you look at the rates of the incumbent providers, they've come down in every one of those communities," said DJ Weber. "I?can't guarantee that the price difference is going to be the difference in your tax increase or anything like that, but I can tell you that looking at the studies, if you look at the actual facts from Spencer or Algona, those services have come down in prices. We haven't raised our phone rates in our communities since we put it in. They've actually seen rate decreases. There's a lot of factors you have to figure."

Curtis Dean cited "a real world example:?I was in Spencer for the first decade of the Century, 2000 to 2010. People in Spencer saved over $10 million total on what they paid for their telecommunication vs comparable cities served by the same providers nearby. By the way, when we calculated those numbers in Spencer, we were using Emmetsburg as the comparison."

When would service be initiated?

"If this passes Nov. 5, I would assume the Board (of Trustees) will ask Mr. Butler to prepare the documents to go out for bid letting in January or February," said John Bird. "You'll have boring equipment in your front yards when the frost goes out."

Addressing the topic of raising property taxes, Bird said, "The notes that we're talking about issuing here, we have to have voter approval to issue them, because if the revenue generated from operation of this utility aren't sufficient to pay down this debt, we will have to levy a tax for about half of the debt service, if we are at 60-percent subscribership."

Deb Davis addressed bringing fiber to the home:?"What we're looking at right now once you sign up and we can let the bids out for the contract, we probably will have installation free. That might go for six months; the time limit has not been determined at this time. After that, there will probably be an installation fee. The reason being, if we can let it when the contract is let to bid it will be negotiated in. It will be a bigger volume."

Davis encouraged everyone with additional questions to contact any member of the Board of Trustees, City Council or stop at City Hall.

"We might not know the answer, but we can get one. We've got these guys on speed dial," she said, indicating the employees from TCA.

Emmetsburg voters will vote yes or no on Public Measure D at the Tuesday, Nov. 5, City Election. Emmetsburg voters will cast their ballots at the Election Center on 1302 Broadway from 7 a.m. to 8 p.m.